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AB 2050 to Reform the Ellis Act Reintroduced

For immediate release:

Today, AB 2050, Ellis Act reform was reintroduced by Assemblymember Alex Lee. AB 2050 would curb property speculators who misuse the Ellis Act from evicting buildings full of rent-controlled residents, many who have lived there for decades. The reform to the Ellis Act would ensure that this type of eviction cannot be used until after five years of property ownership. 

The bill is jointly authored by Assemblymember Wendy Carrillo (D-Los Angeles), principally co-authored by Assemblymember Ash Kalra (D-San José), and co-authored by Assemblymembers Richard Bloom (D-Santa Monica), Mia Bonta (D-Oakland), Adrin Nazarian (D-Van Nuys), Phil Ting (D-San Francisco) as well as Senators Ben Allen (D-Santa Monica) and Henry Stern (D-Los Angeles).

The bill is co-sponsored by the Coalition for Economic Survival and the Tenderloin Housing Clinic.

“Protecting our affordable housing supply is one of the important keys in preventing homelessness,” said Assemblymember Alex Lee. “Our broad coalition supports our sensible reform to install guardrails to defend against displacement from corporate real estate speculators while continuing to respect the rights of small-scale landlords.”

The Ellis Act is a 1985 California state law that allows landlords to evict residential tenants when exiting the rental business. While the Act was originally intended to protect small mom and pop landlords who could no longer maintain their rental properties, the Ellis Act’s loopholes have been used to acquire rent control housing, evict tenants, and sell the property for a higher profit.

Studies show that the vast majority of Ellis Act evictions occur within the first five years of an owner purchasing a property, indicating that these property owners had no intention of being in the rental business in the first place. There has even been a trend of "serial evictors” who evict tenants from multiple buildings to convert the units to other uses such as condominiums and tenancies-in-common, and then acquire new rental properties for the same purpose.

Small “mom and pop” landlords, may qualify for an exemption from AB2050 if they meet all of the following: 

  • Operate the property under their name as a natural person OR manage the property with an LLC in which there is no more than four members, and all members are natural persons OR they hold the title to the property as a trustee in which all beneficiaries are natural persons
  • Natural person(s) are the sole beneficial owners of the property, with the exception of a person who holds title to the property as a trustee
  • Natural person(s) who own the property each directly or indirectly own four or fewer residential units in the aggregate, not including the owner’s principal place of residence including those who operate a Limited Liability Company (LLC) to conduct rental business

“Any effective effort to address our affordable housing crisis must prioritize preserving our existing affordable housing along with producing new affordable housing for we will never solely build our way out of our affordable housing emergency,” said Larry Gross, Executive Director of the Coalition for Economic Survival. “The Ellis Act undermines meaningful efforts to do so, and the passage of AB 2050 must be seen as a crucial component to meeting the state’s affordable housing needs.” 

"We came closer in 2021 than ever before to ending speculator evictions under the Ellis Act,” said Randy Shaw, Executive Director of the Tenderloin Housing Clinic. “By amending the bill to address member concerns we are hopeful that the legislature will restore the original intent of the Ellis Act by passing AB 2050.”